Question

The rate at which the consumer is prepared to sacrifice the small quantity of one good or a little more of the other good is called…….

A.   Law of returns.

B.   Diminishing marginal return.

C.   Law of demand.

D.   Law of substitution.

E.    Marginal rate of substitution.

Answer 1

The answer is,

E. Marginal Rate of Substitution; is the rate at which the consumer is prepared to sacrifice the small quantity of one good for a little more of the other good.